Question

alt Disney W ... 3 Homework Part 2 Required Information The following information applies to the questions displayed below.] Starting in May, Nicole has decided that she has everything she needs to open her doors to customers. To keep up with competition, Nicole has added gift certificates and has started to advertise her company more to keep her business going in the long term. Here is a sample of some transactions that occurred in the month of May at Nicole's Getaway Spa (NGS) for an irables from Spars on account to use May 1 Paid $3,200 cash for an insurance policy that covers the period from June 1 until May 31 next year May 4 Ordered five new massage tables from Spa Supplies Unlimited for $270 each for future delivery. May 7 Provided $815 of spa services to customers on account May 10 Received spa supplies purchased for $1,120 on account to use at Nicole's Getaway Spa May 13 Received a bi11 for $56 for running an advertisement in the newspaper in May. The bill was paid in cash. May 16 Paid one-quarter of the amount owed from May 10. May 19 Customers paid $1,85e cash for NGS gift cards. No gift cards have been used. May 2e obtained financing from the bank by signing a $5,889 two-year note payable. The $6,800 cash was deposited in NGS bank account May 22 Received two of the massage tables ordered on May 4 and paid for the two tables in cash May 25 Paid $535 cash for utility bills for services received and billed in May 2. Calculate NGS's preliminary net income and net profit margin for the month. (Round "Net Proflt Margin" to 1 decimal place.) NGS Preliminary Net Income NGS Net Profit Margin

Answer 1

Calculation of net preliminary income :-

Particulars	Amount ($)	Amount ($)
Income
Spa services provided on account	815
Received gift cards from customers	1850	2665
Less expenses:-
Insurance expense for this month (3200 × 1/12)	267
Advertising expenses	56
Paid one quarter of amount owed from may 10 (1120 ÷ 4)	280
Received 2 massage tables and paid in cash	540
Paid utility bills	535	(1678)
Net preliminary income		987

NGS preliminary net income = $987

Calculation of net profit margin

Net profit margin = (net income ÷ total income) × 100

= (987 ÷ 2665) × 100

= 37.035%

= 37.04% (rounded off)

Hence,

NGS net preliminary income = $987

NGS net profit margin = 30.04%

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